2006 A(nother) Horrible Year for Software

Last year was generally a crummy one for enterprise software [ed., Say what you mean: business software], with only the odd acquisition leavening an otherwise neverending stream of bad news, from low growth, to lower exits, to non-existent new markets. Some think this year will be more of the same, with the sector deep in secular decline, with all the major enterprise [ed., Business!] software categories dominated & declining, and with growth merely a memory. Others think that negativity is vastly overdone, and that 2006 will actually see a snap-back recovery in business spending on technology, including on software.

So, here are three views on the 2006 software [psk., There, I won’t use the word at all] outlook:


  1. Question is, why is it so? Is there no room for such software? Poor business models? Or just a general industry-wide malaise that leads to companies stinging on software spending?
    I am not as negative on 2006, but certainly the outlook is cautious at best.

  2. free and open source software has hit the industry like a comet hitting the dinosaurs (pun intended).
    only the most vertical markets will be safe from free software, and within a decade many of those won’t be safe either.
    writing software is no longer difficult. basic libraries for almost all primitive platform and standards-based operations are freely available. the market for glue software to tie these systems together is entirely owned by free and open tools. and finally a lot of software is going online, where it is coincidentally built using free and open tools.
    its not just about how easy it is to create code, lets also talk about the huge corpus of code that just sits out there waiting to be used.
    at home i use 100% free and open source software and i can do practically anything a windows user can do. at work i use free and open software almost exclusively (s&p 500 firm built almost entirely on free software).
    every year things will look better for free software and worse for closed and sold software. in ten years i would be surprised to see any major companies surviving solely on software sales or service contracts on software.